Intel plans chip for iPhone rivals

No. 1 maker working on ultra-low-power chip suited for multiple-application devices to compete with Apple's.

By Rob Kelley, CNNMoney.com staff writer

March 5 2007: 1:31 PM EST

NEW YORK (CNNMoney.com) -- Intel is working on a low-power chip designed for portable multiple-application devices that will compete with Apple's iPhone, its CEO said Monday.

The chip will meet the demanding power, space and performance requirements of handheld devices and will be available later this year, CEO Paul Otellini told analysts and investors at Morgan Stanley's Technology Conference in San Francisco.

His presentation was monitored via Webcast.

"Virtually every computer and handset manufacturer is struggling to figure out how they're going to compete with Apple's iPhone," Otellini said. "If we get the power and performance [of the Intel chip] right, it's going to be a killer combination."

Intel is working for ways to grow as its core products - desktop and notebook processors - become commodity products with slimmer margins.

It has faced intense price competition in the processor space from No. 2 chip maker AMD, which gained substantial market share in 2005.

Intel is looking to grow as a chip provider for portable devices as the world of computing becomes increasingly mobile.

Apple has not specified which company is producing the main processor for the iPhone, which is slated to be released in the U.S. in June.